Gem Motors India Private Limited, Hyderabad V. DCIT, Circle-2(2), Hyderabad

ITA 93/Hyd/2023

AI Insights

The case involves GEM Motors India (P) Ltd, which appealed against the order of the CIT (A) NFAC confirming the disallowance of Rs. 47,82,198 for belated deposit of Employees' Contribution to Provident Fund and ESI. The initial disallowance was made by the CPC Bengaluru under section 143(1) of the Income Tax Act, 1961. The Tribunal heard arguments from both sides and considered various decisions before concluding that the disallowance was justified based on the Supreme Court's decision in Checkmate Services Pvt Ltd vs CIT, which clarified that contributions not paid within the prescribed time are not deductible under section 36(1)(va).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130744 (ITAT-HYDERABAD)
• Duration Of Justice: 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 15-02-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 05-02-2023
• Other Referred Cases: Checkmate Services Pvt Ltd vs CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 143(1)

Judgement Text

Page 1 of 4 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member ITA No.93/Hyd/2023 Assessment Year: 2018-19 GEM Motors India (P) Ltd, Kondapur, Hyderabad PAN:AACCG7660H Vs. Dy. C. I. T. Circle 2(2) Hyderabad (Appellant) (Respondent) Assessee by : Shri Mohd. Afzal, Advocate Revenue by: Shri K.P.R.R. Murthy, DR Date of hearing: 16/02/2023 Date of pronouncement: 17/02/2023 ORDER Per R.K. Panda, A.M This appeal filed by the assessee is directed against the order dated 2.12.2022 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2018-19. 2. There is a delay of 6 days in filing of this appeal by the assessee for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application and after hearing the learned DR, the delay in filing of the appeal by the assessee is condoned and the appeal is admitted for adjudication. Page 2 of 4 3. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A)-NFAC in confirming the order of the CPC Bengaluru wherein an amount of Rs.47,82,198/- has been disallowed u/s 36(1)(va) on a/c of belated deposit of Employees’ Contribution to Provident Fund and ESI. 4. Facts of the case, in brief, are that the assessee is a company and is the authorised dealers of Maruti Suzuki Cars. It filed its return of income on 27.10.2018 declaring total income of Rs.2,33,59,958/-. The CPC Bengaluru passed an intimation u/s 143(1) of the I.T. Act computing the income of Rs.2,81,42,158/- wherein an amount of Rs.47,82,198/- was disallowed u/s 36(1)(va) on a/c of belated payment of EPF & ESI. 5. In appeal, the learned CIT (A) NFAC upheld the order of the CPC in disallowing the Employee’s Contribution of PF & ESI u/s 36(1)(va). 6. Aggrieved with such order of the learned CIT(A)/NFAC the assessee is in appeal before the Tribunal. 7. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A)/NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the Assessing Officer/CPC in the order passed u/s 143(1) of the Act disallowed an amount of Rs.47,82,198/- being belated payment of Employee’s Contribution to PF & ESI by invoking the provisions of section 36(1)(va) which has been upheld by the CIT(A)/NFAC. It is the submission of the learned Counsel for the Page 3 of 4 assessee that such payments, though deposited belatedly as per the respective Acts, however, such payments were deposited before the due date of filing of the return and therefore, no disallowance should have been made. We do not find any merit in the above argument of the learned Counsel for the assessee. We find the Hon'ble Supreme Court in the case of Checkmate Services Pvt Ltd vs CIT in Civil Appeal No.2833 of 2016 dated 12.10.2022, has categorically held that if the employees’ contribution to PF and ESI to the extent is not paid within the time prescribed under the relevant PF Act, then same is not allowable under section 36(1)(va) of the I.T. Act, 1961. It has also been held that the provisions of section 43B would not apply to the provisions of section 36(1)(va) of the Act in respect of employee’s contribution. Respectfully following the decision of the Hon'ble Supreme Court (cited supra), the grounds raised by the assessee are dismissed. 8. In the result, appeal filed by the assessee is dismissed. Order pronounced in the Open Court on 17 th February, 2023. Sd/- Sd/- (LALIET KUMAR) JUDICIAL MEMBER (R.K. PANDA) ACCOUNTANT MEMBER Hyderabad, dated 17 th February, 2023. Vinodan/sps Page 4 of 4 Copy to: S.No Addresses 1 Gem Motors India (P) Ltd C/o Mohd. Afzal, Advocate, No.402, Sherson’s Residency, 11-5-465, Criminal Court Road, Red Hills, Hyderabad 500004 2 Dy.CIT, Circle 2(2) Hyderabad 3 CIT (A)-NFAC, Delhi 4 Pr. CIT-, Hyderabad 5 DR, ITAT Hyderabad Benches 6 Guard File By Order